Stockton takes over stalled marine highway project

Thursday, February 07, 2013

After a series of delays, the Port of Stockton last week terminated the concession agreement with a private company tasked with managing, marketing and operating a new barge service to move containers between the port and Oakland.
The Stockton port authority will assume leadership and direct operational control of the service with a target start date of early spring, Mark Tollini, deputy port director for trade and operations, said in a phone interview.
"It was mutually agreed that the port is in a better position to advance the project than a private company was because of so many public entities are involved," he said, referring to the respective port authorities, the U.S. Maritime Administration, regional air quality management districts, and U.S. Customs.
In December 2011, the Port of Stockton hired Salt Lake City-based Savage Cos. to operate the barge service. Officials planned to begin scheduled service during the first quarter of 2012. Stockton, Oakland and the the Port of West Sacramento received a joint award of $30 million from the U.S. Department of Transportation's TIGER grant program in early 2010 to develop the infrastructure for the service, which is intended to take trucks off the busy I-580 and I-5 highways, reduce diesel pollution and allow agricultural exporters to move overweight loads to Oakland for transfer to ocean-going vessels. The project also received $3.2 million from the local air quality control boards.
Port officials estimate 1,600 containers per day move between Stockton and Oakland. Potential users of the container-on-barge service include rice mills, meat packers, wineries, and fruit and vegetable growers in the San Joaquin Valley and elsewhere. Steel pipe and other heavy import commodities are viewed as candidates for the backhaul leg up the San Joaquin River.
Stockton received $13 million to purchase two 140-ton mobile harbor cranes and make needed wharf improvements, including a container yard. Stockton also bought two used barges and had them modified with cells to handle containers. Savage, a logistics provider specializing in support for heavy industries, was responsible for operating the barges under a bareboat charter, hiring a tow company, and finding stevedores to operate the terminals on both ends.
Advocates of converting truck freight to barges are holding up the "M-580" marine highway as a potential model for short-sea shipping, which is being pushed by the DOT as an environmentally friendly mode that reduces congestion but has yet to prove economically viable on a consistent basis.
Tollini declined to give details about why Savage was unable to get the project off the ground, only saying that the time had come for a change after several start-up dates had come and gone. Industry officials familiar with, but not involved in, the project said one hiccup involved getting the container cells lined up correctly on the barges.
The Central Valley Business Journal first reported the split with Savage.
The Port of Stockton is managing the project now and is in discussions with a tow-boat company and marine terminal operators, Tollini said.
Another issue that has to be resolved is how to efficiently get inbound containers through U.S. Customs and Border Protections' security system in Oakland. The border agency requires all containers to pass through radiation portal monitors, which are typically set up near the gates where trucks exit marine terminals to check for radiological material or nuclear weapons being smuggled into the nation. Placing containers on trucks and forcing them to exit and re-enter the port would be prohibitively expensive and time consuming for a barge transload operation. Tollini said CBP has been extremely supportive and agreed to dispatch mobile detection units to the transfer site when the barges are in Oakland. Yard hostlers will move the containers on chassis from the vessel, pass by the radiation detectors and deliver the containers to the barge terminal.
Port officials will have to coordinate the barge schedule with the arrival and departure of the container vessels, he said.
Tollini said initial plans call for both barges to operate weekly and serve a limited number of terminals in Oakland. - Eric Kulisch